What dealers need to know about Harley-Davidson’s new finance partnership
Harley-Davidson has reached a key milestone in its recently announced partnership with global investment firms KKR and PIMCO, completing the sale of residual interests in securitized consumer loan receivables.
The move is part of a strategy to make Harley-Davidson Financial Services (HDFS) a capital-light business while continuing to originate and service retail loans for dealers and customers. By shifting its financing structure, Harley-Davidson says it will strengthen its balance sheet and reduce risk, while maintaining financing support for motorcycle sales.
The transaction generated more than $230 million in proceeds through the sale of interests tied to roughly $2 billion in retail loan receivables and $1.8 billion in related debt. Additional elements of the deal, including the sale of minority equity stakes to KKR and PIMCO, are expected to close by the end of October. At that point, the firms will also begin acquiring new retail loan receivables originated by HDFS.
“Completing this step eliminates approximately $2 billion in entities and $1.8 billion of debt from our balance sheet, while generating proceeds to support our capital allocation priorities. We remain committed to delivering outstanding service levels for our dealers and customers as we move into the next phase of this partnership,” — Jochen Zeitz, Harley-Davidson chairman, president and CEO.
Dealer Takeaway: This change means Harley-Davidson’s retail financing arm will continue to operate as before, but with the backing of deep-pocketed financial partners designed to provide long-term stability and growth. Harley is shifting to a capital-light model, which frees up resources and could support new initiatives that benefit dealers and customers alike.
Harley would sell way more bikes if they would come off their high horse and not be just for the wealthy class. I have ridden a Harley since 1974, but this year had to change brand because I can’t afford a new Harley anymore. If you don’t drop your prices down, you’re going to have other brands out sell you.